A further integration of the electricity market in the EU opens up for the use and export of climate neutral Nordic electricity. As production becomes less predictable there will be strengthened requirements on regulation resourcesand on network capacity. This accentuates the need for a thorough knowledge of, as well as a full perspective on, the future electricity market, the production of electricity, the power grids as well as the use of electricity.

The research programme North European Power Perspectives (NEPP) has been initiated with the aim to strengthen the knowledge of the following topics:

The development of the Nordic power system as a result of all-embracing factors such as, for example, the European and Nordic climate and energy policies

Technological challenges following the integration of large amounts of wind power

The future need for regulating power resources in the (Swedish) and Nordic power system under differentscenarios. How can we ensure that we use the cheapest resources?

The design of central institutions and the regulatory framework of the electricity market to enablehigh-volumes of intermittent electricity production

What are the needs in forms of grid reinforcements that will emerge in the Nordic countries, and what is required from the transmission capacity to the rest of Europe for us to export large amounts of electricity?

Great challenges for the Nordic power system

The present climate and energy policy within the EU and the Nordic countries implies increased integration of markets and provides great opportunities for expansion and export of renewable Nordic electricity, but:

Will Northern Europe be able to handle increased amounts of Nordic electricity?

Will the need for regulating resources and expanded network capacity increase as a larger shere of the total production become less predictable and there is a surplus situation in the Nordic countries?

Most probably, we will have to get used to the fact that large amounts of intermittent power production will lead to more volatile electricity prices

The cheapest regulation resources are found at the end of the use level, although it requires investments and regulatory changes in order to unlock this potential

Investments in technology, such as smart grids, will be needed in order to handle intermittent production

The regulation of the electricity market must be adapted in order to meet a future situation that looks quite different compared to the 1990s when the regulatory framework of the electricity market was designed.

Preparing Nordic actors for future challenges

There are a wide range of complex issues of great importance for the future electricity market and the development of the power system. Below, a few examples of such questions are listed. The intention with NEPP is to carry out joint syntheses with the participation and contribution of all the senior scientists that are part of the cluster. For example:

How are the requirements for investments in renewable electricity and nuclear power in the Nordic countries and other EU countries affected by the political goals and the chosen policy instruments

The future need for reinforcements of the power grids in the Nordic countries and to the rest of Europe

The need for future regulating ability of the Swedish and the Nordic power system given different scenarios. The aim is to identify what resources that could best meet this need:

– What are the opportunities in existing and future hydro-electric power, including pumped storage?

– How can district heating contribute to handling intermittent power (CHP, heat pumps, electric boilers)?

– What can different actors do to activate electricity consumers?

– How is the issue concerning regulating power handled in other countries with a large share of wind power?

What are the implications for electricity export from the Nordic countries and what is required of the transmission capacity to Europe to be able to export large amounts of electricity

The need for the design of /key institutions and the regulatory framework of the electricity market. For example, how should such rules for the electricity market best be adapted to new conditions?

The development in electricity use, e.g. efficiency requirements that reduce electricity use and new areas such as electric vehicles that increase the use. Customer interest in, as well as their opportunities for small scale production, is also important.

Research focus

The intention is that NEPP will provide a structure for research that is based both upon a number of research focus areas as well as the ongoingactivitiesof the research projects that are part of the cluster.

1. The design of the policy instruments and how they affect the development of the power system:

The choice and range of the policy instruments (what will be the role of electricity for meeting political climate and energy goals)

The ability and willingness to trade under the RES-directive, and the possible magnitude of this trade

2. What options do countries of continental Europe have to live up their committments under EU's Climate and Energy policy? for example:

The technical capacity of the power systems when it comes to increased electricity imports from the Nordic countries

3. Is there room for further expansion of hydro-electric power in Sweden and/or in the Nordic countries?

4. What are the needs for regulating power in the future given different scenarios?

How can we achieve this need for regulation in existing and future hydro-electric power systems? How is the need for regulation affected by different reinforcements of the power grid?

5. How do we most effectiviely maintian a stable power grid with respect to voltage level of loads and frequency control?

Are there other ways to maintain the need for regulations? For example, on the consumer level? What are the time frames for such solutions?

6. To what extent can increased consumer flexibility contribute to an increased regulating ability?

7. Would it be effective to introduce more frequent autions on the spot market?

To handle the increased uncertainties associated with a greater share of intermittent power productiono To handle the increased uncertainties associated with a greater share of intermittent power production

8. How can the regulatory framwork and incentives be designad in order to create rational solutions?

It is important that the regulatory framework that govern the electricity market are designed with reagrd to the new conditions that may apply in the years to come. When th existing framwork was designed in the 1990's the situation was quite different from what we can expect to be the case in 10 years.